Call to curb ASIC’s powers

The Rule of Law Institute of Australia (ROLIA) is strongly opposing amendments to the Corporations Act which would have the effect of increasing the powers of the Australian Securities and Investments Commission (ASIC).

In a submission to the Senate Economics Committee, the ROLIA has warned that the changes outlined in the Corporations Law Amendment Bill No 1 of 2010 would confer even more coercive powers on ASIC and said this was a concern in circumstances where the Parliament had seemed to be unaware of ASIC’s existing powers.

“Conferring additional powers on a regulatory agency is a serious matter,” the submission said. “First, the Parliament needs to be assured that the regulator will not act in an arbitrary manner. Second, it is important that the community respect the actions of a regulator.”

The submission then raised the issue of answers provided by ASIC to Senate Estimates revealing that the regulator had issued more than 18,600 coercive orders during the last three years and said the use of coercive powers needed to be accompanied by demonstrated capability improvement and performance monitoring.

The ROLIA submission argues that the exercise of ASIC’s coercive powers should remain subject to appropriate safeguards, particularly its ability to apply for search warrants.

It said that under the existing legislative proposals, ASIC would be permitted to obtain a search warrant in circumstances where no breach of the Corporation Act or any other law had occurred.

“The power of ASIC to obtain a search warrant under the Crimes Act 1914 for suspected criminal contraventions should be sufficient,” the submission said. “The creeping expansion in coercive powers given to ASIC should be stopped until it has been carefully reviewed.”